S&P 500 Futures cling to record top as vaccine optimism battles covid, tapering woes

  • S&P 500 Futures pause around all-time high after three-day uptrend.
  • Moderna, US President Biden renew vaccine optimism, Asia-Pacific magnifies virus woes.
  • US PPI renews reflation fears but upbeat earnings, Jobless Claims saved Wall Street bulls.
  • Risk catalysts are the key, US Michigan Consumer Sentiment Index will be important too.

S&P 500 Futures remains sidelined near the record top surrounding 4,460 during early Friday. The risk barometer refreshed the all-time high the previous day but a lack of major data/events limits the latest moves.

Read: Wall Street Close: Bulls keep reins despite anxiety over Fed’s tapering

Also contributing to the sluggish sentiment could be the mixed catalysts concerning the coronavirus, vaccine the Federal Reserve’s (Fed) tapering during a light-calendar day in Asia.

Talking about negative first, Delta covid variant is the major hurdle. The latest suggests infections in Queensland and Victoria stay closer to the recent highs whereas China reports 99 new cases versus 81 marked the previous day. Further, Thailand reports a daily record of 23,418 new covid cases whereas the US death toll remains near a five-month high. It should be noted that Bloomberg came out with the news early in Asia saying, “Slowest vaccine drive makes Japan G-7’s worst economic performer.”

The same might have pushed US President Joe Biden to take another positive step by urging for the vaccine price cut. “Biden called on lawmakers to enact legislation aimed at lowering drug prices, including allowing Medicare to negotiate drug prices and imposing penalties on drugmakers that hike prices faster than inflation,” per Reuters.

On the same line could be Moderna’s study suggesting a six-month antibody versus the virus strains.

Elsewhere, the previous day’s US Producer Price Index (PPI) data for July, up 1.0% MoM versus 0.6% expected, renewed reflation woes. Following this, Reuters’ poll said, “The Federal Reserve will announce a plan to taper its asset purchases in September.” Also backing the policy adjustment chatters are the US inflation expectations that edge higher around early June tops.

It should be noted that chatters over China’s monetary policy easing and the RBA’s need to keep easy money policies fail to entertain Asia–Pacific markets.

Looking forward, qualitative factors will remain important for the investors to watch for fresh direction as Friday’s calendar has the US Michigan Consumer Sentiment Index for August as the only important data to watch.

Read: US Michigan Consumer Sentiment August Preview: Payrolls, inflation and the pandemic

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